Today our colleagues are reporting luggage maker Samsonite had to price its Hong Kong market launch at the bottom rung of its expected range.

Then, in the IPO “hot” camp is Pandora, the digital-radio company. The company could be tagged with a big digital question mark. It doesn’t make money. The royalty fees Pandora has to pay to stream music seem to be crushing the company. But investors seem to want a piece of Pandora.

This morning, Pandora raised the amount of shares it plans to sell in its IPO, to about 6 million shares from 5 million, according to a regulatory filing. And it raised the estimated price for its IPO, to $10-$12 a share from $7-$9.

As Deal Journal colleague Lynn Cowan wrote, May was the busiest month for IPOs since December, with 18 stock-market debuts. But their performance was all over the map. Six of the May IPOs priced below their expected range, and 8 ended their first day of stock trading in negative territory. Companies such as Boingo Wireless and LinkedIn started out strong in their May stock launches, only to see their shares wither since then.

The tug-of-war over IPO market no doubt reflects debate about the health of the economy itself, and some sensible choosiness by investors about which companies are worth buying from the public-market cradle. But it also makes the bankers jobs tough to set prices and measure expected demand for coming IPOs for companies such as Groupon.

Comments (3 of 3)

that's about right. i've been looking for a heavily-commented article on linkedin, but to little avail. maybe it's finally clear to the average investor that low-float, underpriced IPOs only benefit investors who are part of the initial offering.

9:39 am June 10, 2011

zug wrote :

Well, judging by the number of comments, there's your answer. To the average reader or average investor, IPOs are either a non-event since they can't get in, or a huge risk. Only skilled traders with tons of protection in options are willing to take the gamble. Look at ChinaCache, a successful IPO. Yes successful but look a the stock price now, down from 30 to 7.

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